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The 2020 Public Services Trust Blog

Wednesday, March 3, 2010

Deep Impact

By Henry Kippin

Todays figures on NHS primary healthcare trust overspends are a sharp corrective to the idea that cuts to public spending will hit the back room only.  Chief Secretary to the Treasury Liam Byrne is apparently impressing upon department heads the need to find big savings, but the scale of overspend in some trusts (Enfield being the largest) illustrates the challenges of making this happen – and the likelihood that institutions will feel the pain as well as service users. 

In the same article, the Kings Fund’s John Appleby uses Manchester as an example – “in Manchester you have 25 acute hospitals.  That is probably too many and it underlines what big questions the real funding cuts entail.” 

These are massive choices to be made, with real human consequences and long-term (social and behavioural) impacts for communities.  

This speaks to a key tension in the current debate on public services – and one that has not really been explored in depth by any of the parties.  Cuts as an end in themselves seem to be necessary in the short term.  But the question is: how do they fit into a longer term perspective? 

In the next couple of weeks the Commission will publish its interim report, which will set out such a vision.  It wont be everyone’s cup of tea, but it will at least try to force a conversation that gets beyond the short term, and asks politicians and the public to think about ten years time as well as tomorrow.  If this really is a ‘moment of historical discontinuity’ as Vernon Bogdanor has said, we need to do both.

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Posted by Henry Kippin at 11:26 am
Friday, July 17, 2009

Urban Degeneration

By Henry Kippin

The Centre for Cities published a new report this week on the potential impact of public spending cuts for some of the UK’s main urban centres.  As one might expect, cities heavily dependent on public sector employment – such as Newcastle, Swansea, Liverpool – will be in deep trouble.  The report speculates that ‘public employment could shrink by 240,000 to 290,000 jobs between 2009 and 2014.’ 

Those three cities listed above (and many other, particularly northern, examples) already know what a biting recession feels like, and will look to the future feeling pretty desperate.  Trouble is, the alternatives to public sector employment hardly look better.  The report suggests that “one implication will be the increased importance of facilitating low-and mid-skilled employment growth in the private sector.”  But the private (and particularly service) sector is still in retrenchment, so the means to facilitate this sideways shift of the workforce is hardly clear. 

For many in cities like Newcastle, there is a bitter irony felt towards the notion that a ‘bloated’ public sector must inevitably pay for our fiscal crisis.  The public sector has been a fundamental driver of economic growth during the last 15 years, with inflows for infrastructure and job creation providing the platform for private sector investment to capitalise on. 

Cutbacks in these cities are not just about eliminating waste and imbuing a culture of efficiency; they are about people, jobs and livelihoods.  There is clearly much pain to come, especially outside of the south-east.  Some of it will be unavoidable.  But we should never trivialise the problem, particularly sitting within the London bubble.  This recession is no longer about a few city bankers needing a bail-out, and those big issues we debated last year about the need to better protect people against the real risks they face, have not gone away.     

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Posted by Henry Kippin at 9:20 am
Monday, June 22, 2009

The Trident Trade-Off

By Henry Kippin

Sarah Tusa writes in the Times today on the thorny problem of Trident – which crosses our path frequently as an example of a ‘quick-win’ initiative for those looking to cut the fat from public spending. David Davis wrote about this in the FT in April, following a pre-Budget publication from think tank Reform. He argued that

“There is no firmer advocate of nuclear deterrence than me, but even I have some difficulty seeing the justification for a wholesale upgrade of Trident. Our system was designed to maintain retaliatory capacity after a full-scale Soviet nuclear onslaught. Now our likeliest nuclear adversary will be a much smaller, less-sophisticated state. Should not the costs reflect that?”

Maybe so, writes the defence consultant, but there are serious trade-offs to think through in scrapping the proposed Trident upgrade, as today’s article makes clear. First is the question of how much such a move would actually save, and how this compares to other large-scale (and seemingly more worthy) initiatives:

“Estimates of £30 billion and over … combine the capital cost…with the annual operating costs for a 25-30 year life… On the same basis, a comparable civil project, the 953-bed Norfolk & Norwich University Hospital will cost not £229 million, as announced in 1998…but £16 billion, including PFI charges, staff and equipment. Any debate should at least be on an apples-to-apples basis.”

The second trade-off is about global status. Tusa’s argument is that failing to replace Trident would relegate the UK to the status of a “second-rank” European country, raising the spectre of losing its seat on the UNSC. On top of this, jobs are at stake – “at least 15,000…could depend on the Trident replacement.”

Whatever the politics of the piece (and I am certainly not convinced by some of it), we should welcome a more sophisticated debate about the choices that face the next Government. There will always be difficult trade-offs to negotiate, and it is bordering on the disingenuous to suggest that ‘quick wins’ are possible even for controversial initiatives such as Trident or ID cards. As the author warns, “there are no easy cuts left in defence”. But wherever the axe falls across Government spending, none of it will be easy.

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Posted by Henry Kippin at 9:56 am

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